An Interesting Tale of Regulation

Bottom line:  Never assume the states reasons of "safety" or "consumer protection" are the actual reasons for a regulation.  Regulation is much more likely to be protection of powerful political interests:

Flashback to 1959. The airline industry is on the cusp of its fifth decade, but there is a problem facing younger pilots who want to enter it. The old-timers just won't retire, and this frustrates potential entrants with much flying experience and training, thanks to military service in World War II, Korea, and elsewhere. The result is a sort of malinvestment in human capital, with many men trained to be pilots without private-sector jobs to justify the training.

What is a young, aspiring pilot to do? Well, he and his peers could make their presence and skills known to the airlines, signaling that the labor market had changed and that it would be possible to hire new pilots at lower wages. Not only would some airlines opt for the lower-priced laborers, thus lowering the airlines' reservation price required to provide flights to consumers, some owners of capital might invest in new airlines, thus increasing consumer choice, industry output, and create a downward pressure on prices.

Such would be the market solution, coordinated by changes in relative prices, and it would be peaceful, characterized by voluntary interaction and compromise by the parties involved. Unfortunately, there was another option, requiring the pilot to join a pilots union to lobby the federal government to enact rules forcing existing pilots to retire at age 60. All the union needed was a lobbying presence and some sympathetic regulators at the FAA.

Guess which option was chosen? It seems that in 1959, the aspiring pilots found a sympathetic ear in C.R. Smith, the then-president of American Airlines who also wanted to ground his older pilots. The industry was switching to jet engines, and Smith wanted to freeload off of the tax-supported training with those engines many of the younger pilots received in the military. So Smith instructed his lobbyists in Washington to rewrite FAA rules to force retirement at 60, and in December of 1959, an FAA administrator named Elwood R. Quesada simply authorized them. In January of 1961, Quesada retired from the FAA and immediately joined the board of directors of American Airlines. The retirement age rule has been in effect for almost 50 years.


  1. Jim Collins:

    Anybody remember the Aloha Air 737 that decided to become a convertable in mid-flight? After the incident the FAA and NTSB praised the pilot's experience as the major factor in the aircraft landing safely. About 6 months later that same pilot was forced to retire due to this regulation. I wonder how old the pilot who just landed in the Hudson River is?

  2. mishu:

    He's 58 years old.

    Two more years for Sulley.

  3. Brandon:

    Just FYI this FAA rule was recently overturned and the retirement age is now 65, the same as the rest of the world. I might add that the law was overturned by those who probably would have initally supported the rule, but are now in a position to benefit from a later retirement date.

  4. Dr. T:

    For most jobs, the voluntary retirement age (at which one can collect his pension) is 65. Few jobs have mandatory retirement at age 65. Commercial pilots must pass physical exams on a regular basis. If a 70-year-old can pass the exam and still wants to pilot, why shouldn't he be able to?

  5. morganovich:

    i'm surprised they didn't just go for the 35 hour work week.... :-P